Ten Percent Inflation in the US?

You know its funny – if you look at CPI numbers – or the Consumer Price Index put out by the government, you would think that inflation has been running at a lowly two to three percent for the bulk of the past decade. In fact, CPI growth has averaged just around 2.6% over the past ten years. The consumer price index is released by the US Bureau of Labor Statistics and it is supposed to measure price changes in a typical “basket of goods” that a US household would purchase. Thus, households, industry leaders, government officials, economists, and finance gurus watch CPI to determine inflation, and people make investment, wage change, and financial decisions based in part on that data. Very important stuff, really.

So – going by CPI – something that was $100 ten years ago would cost $132 today. That doesn’t seem too bad considering that wage growth has significantly outpaced CPI growth (this is somewhat of a self-fulfilling thing since employees demand wage increases starting at inflation), and the stock market and housing prices have appreciated at a much higher average pace than 2.6% per year. But doesn’t seem fishy here? I know for a fact that costs have been going up like crazy – think gas, education, taxes, medical costs, food, hmm… nothing here seems to be staying the same. Seems like all those things have gone up in costs quite a bit more than 2.6% per year. Has anyone tried to go to a pro sports game recently? Anyone?

Comments RSS You can leave a response, or trackback from your own site.